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Will 2010 fatten, or thin, the coffers?
Starting a new calendar year isn’t the same as starting over, but it does tend to make us ponder the past and wonder about the future.
The economy seems to be growing, if only by a little, so we can hope for better days ahead as we think of what has hit us during the past two years.
Until tax revenues begin increasing, of course, there will be a continuation of government efforts to adjust to having less than before.
Revenues had been pushed upward by an unsustainable level of borrowing and spending by taxpayers for a few years, and unfortunately government spending followed suit.
Neither citizens nor government set aside enough in savings during the boom to breeze through even a short economic downturn, and this has not been a short downturn.
But ordinary citizens have apparently learned a hard lesson, since their savings rate has gone up substantially — at least for those who remained gainfully employed.
Perhaps during the coming year, personal debt levels and savings will have reached the point that lower prices for housing and automobiles — two segments of the economy hardest hit by the recession — will look like an opportunity rather than a problem.
Competing with pent-up desires by consumers to make big purchases, there may be demands by government for more revenues.
Consumers could find that their ability to make some of those postponed purchases is affected by the diversion of more of their income to the government.
Residents of South Kitsap who commute to work outside our county may feel the effect in tolls paid to cross the Tacoma Narrows bridge or fares paid to ride state ferries.
In the original financing plan for the bridge, a toll increase was anticipated for 2010 even without the effects of a recession, so an increase seems very likely.
State funding for ferry operations probably won’t be increased, because there is no revenue to spare; so a “fuel surcharge” seems likely to cover the gap between budget projections and reality.
These two increases affect a significant number of our residents, since so many live here and work somewhere else.
And, of course, we already know — because we approved them in 2009 — two of our local property taxes will go up in 2010. Both the school district and fire district levies will be higher.
Voter-approved property tax increases for local government are approved in one year and felt in the next, so in 2010 we may see proposals but no other increases before 2011.
Asking for voter-approved tax increases forces us to do more than wonder about the future. We actually have to decide whether we can afford the increase a year later.
One local government entity has already indicated that such a proposal is under serious consideration.
The Kitsap Regional Library board of trustees will decide by late July whether to put a property tax lid lift proposition on the ballot for the November election.
Of course, neither they nor we know whether the economic situation will continue to improve in 2010, so they are going forward with their planning while postponing their decision to the last possible moment.
If things look good in late July, they may conclude that it’s worth the election cost to ask the voters for more revenue.
For KRL, the increase would be for expansion of library facilities, not to fill a shortfall caused by the recession. KRL’s revenue from property taxes hasn’t shrunk — it just hasn’t grown enough to fund an expansion.
The Kitsap county government faces a different situation, since it depends to a large extent on sales taxes which have produced less revenue in the past two years.
If revenue from the sales tax doesn’t soon begin to grow at a rate that can sustain county operations, some other relief may start to appear necessary.
Let’s hope the economy improves enough to eliminate the need for a county tax increase and to make a KRL increase for expansion seem affordable.
Bob Meadows is a Port Orchard resident